CHAPTER 6 The Job Guarantee and Municipal Confederalism: Exploring the National and Local Levels of Program Operation Mathew Forstater n recent years, an approach to full employment known alternatively as Employer of Last Resort (ELR), Job Guarantee (JG), and Public IService Employment (PSE) has been put forward as an effective strat- egy for eliminating involuntary unemployment and promoting economic stability. It has also been argued that JG may be used to promote envi- ronmental sustainability and, more generally, as a vehicle for progressive social policies (Forstater, 2004). Most of the recent proposals for a JG have been put forward within what has come to be known as Modern Mon- etary Theory (MMT), a term that encompasses the Chartalist approach to money and the functional finance approach to managing government budgets (Wray, 1998). The challenge for the JG policy approach is to find the right balance between the national and local levels of its political operation. On the one hand, modern money and functional finance require that the program be paid for at the federal level, but, on the other hand, most propos- als have program management and organization conducted at the local level by NGOs (nongovernmental organizations) and local governments. March 6, 2013 19:23 MAC-US/PLOY Page-145 9781137324771_08_cha06 146 ● Mathew Forstater This chapter outlines the ways in which the communitarian anarchist and social ecology notion of “municipal confederalism” presents possibilities for an appropriate mix of regional and local aspects of JG, along with other advantages of the municipal confederalist framework (and anar- chism generally), including opening up spaces for noncapitalist social relations of production. The Job Guarantee: Basic Outline and Benefits According to the JG paradigm, government offers a public service job to anyone ready and willing to work, no means tests or time limits. The fed- eral government pays the basic JG wage-benefits package, but community groups, NGOs, nonprofit enterprises, and local governments administer and manage the program. There are always enough jobs to employ every- one who needs one, as government provides an infinitely elastic demand for labor. The program creates a strong countercyclical stabilizer, expand- ing when the economy goes into a downturn and contracting as the private-sector demand for labor rises. In addition to providing full employment and macroeconomic stabil- ity, and reducing the social and economic costs of unemployment, JG has numerous other potential benefits. Staying employed maintains the skills of workers, whose productivity declines during periods of jobless- ness. JG can provide training and education that may open opportunities for employment in new occupations and industries. Businesses benefit from hiring workers who have been able to maintain and even enhance their capabilities. By guaranteeing high and stable incomes and demand, the uncertainty characterizing investment decisions is reduced, and firms have the resources and incentives to retool and make use of the latest technologies. In addition to creating jobs, income, and demand, and developing skills and offering opportunities for training and education, JG also supports the provision of public services. Suddenly there is no labor con- straint for providing services often in short supply and for addressing unmet social and community needs. Libraries and community centers can stay open every night, and additional helping hands are available for play- grounds, nursing homes, and recycling centers. Revitalized infrastructure reduces costs and stimulates productivity. JG is also the only real means of achieving the right to employment found in numerous governmental and other documents, such as the United Nations’ “Universal Declaration of Human Rights.” The right to March 6, 2013 19:23 MAC-US/PLOY Page-146 9781137324771_08_cha06 The Job Guarantee and Municipal Confederalism ● 147 employment is also the most important means to many other economic and social rights, such as the rights to food, housing, and healthcare. While conventional fiscal stimulus is unlikely to provide true full employment or to reconcile full employment and price stability, JG addresses unemployment due to both insufficient effective demand and ongoing structural and technological change. In addition, the JG approach deals with the functionality of unemployment, which is com- pletely unaddressed by traditional Keynesian policies. JG as a Vehicle for Social Policy The JG approach to full employment and price stability can also serve as the basis for humanistic social policies. Under such a program, a wide variety of social policies may be introduced that otherwise would not stand a chance. To understand how this might work, consider that work- ers will always have the option to take a JG job. Now imagine what might happen if the JG wage-benefits package included health insur- ance. Employers in the private sector would have to match the JG wage benefits, either line by line or in some other compensating way. Private businesses would be compelled by “market” pressures to either offer health insurance or compensate in some alternative way (higher salary, more chance for advancement, other benefits, or some other attractive part of the offer). Likewise, since the JG wage would be the de facto minimum wage, increases in the JG wage could also be used to pressure businesses to raise wages (or some other compensating feature of their offer). Con- sider what might happen if the JG job came with childcare. It is the same with worker health and safety issues, and general job environment. The list of ways in which JG employment might be used as a “benchmark” to increase the quality of private-sector jobs is limited only by imagination. Next, consider the possibilities offered by millions of new workers available to do public service. Suddenly, there would no longer be any financial or labor constraint to the provision of public and community services (other than the “real” constraints of population size, skills and education, and so on). Habitat for Humanity and Meals on Wheels would always have enough labor, public libraries and community centers could stay open every night, and there would be additional helping hands on playgrounds, at subway stations, in nursing homes, and at recycling centers. The environment benefits would be numerous, from increased cleanup and enhanced parks and recreation to tree planting and the pro- vision of new hiking trails. We know from the history of the New Deal March 6, 2013 19:23 MAC-US/PLOY Page-147 9781137324771_08_cha06 148 ● Mathew Forstater era Works Progress Administration (WPA) in the United States and other successful public service programs just how productive the contributions can be (we can also learn from the mistakes of such programs—e.g., race and gender discrimination must not be tolerated). A JG program could also be used to redefine just what constitutes valu- able work in our society. Presently, the market is used as the measuring AQ1 rod, so if you cannot make your way in the private sector, your life call- ing must not be valuable. Under the JG program, society is free to decide what qualifies as a JG job. Musicians and artists might be free to follow their calling. Oral histories can be documented and preserved through interviews with the elderly. Community gardens can thrive, with JG chefs preparing meals. Addressing the historical legacy of patriarchy and gender exploitation, care for one’s own children and one’s own home can be con- sidered valid JG work. Even education and training may be considered public services. Private versus Social “Efficiency” JG activities should not be evaluated according to private-sector efficiency criteria, but by whether they achieve broader social, macroeconomic, and environmental goals. Capitalist firms are compelled by competitive pressures to use cost-minimizing methods of production, regardless of whether such methods are consistent with other societal goals, such as full employment or ecological sustainability. Because they are not for profit, there is a great flexibility in the design of JG activities that are freed from market constraints. For example, more labor-intensive meth- ods may be used even where more capital-intensive methods are available. JG activities and methods may be selected to avoid bottlenecks and struc- tural rigidities associated with high levels of employment and capacity utilization. In pursuing environmental sustainability, JG activities and production methods may be selected so that they do not use exhaustible resources in short supply and so they do not pollute or aggravate other environmental problems. This is independent of whether or not the JG activities perform any explicit environmental service (which of course they can). It should be becoming clear from the discussion that the JG program has the potential for creating spaces for noncapitalist social relations. Just as JG activities can be designed to pollute less or to use more labor- intensive methods, they can also be designed to be less hierarchical and more egalitarian, with more consensus-based decision making. March 6, 2013 19:23 MAC-US/PLOY Page-148 9781137324771_08_cha06 The Job Guarantee and Municipal Confederalism ● 149 Federally funded, Locally administered If the jobs created through the JG program are to truly serve the com- munity then the community and neighborhood organizations must take the reins and administer the programs to the fullest extent possible, rather than having the federal government involved in the majority of administration. The federal government’s job is to provide the wages and benefits. The initial attempt to employ JG workers must be through reg- istered community service organizations that already exist. In this way the program will be able to employ individuals with minimal additional bureaucracy, and will in addition supply labor to organizations that pro- vide needed public and social services that enhance the quality of life in that region. Because the federal government pays the wage-benefits pack- age, community service organizations obtain additional workers at no extra cost.